What is the weekly return you can expect from Forex?
Many traders are attracted to the foreign exchange market when they see the bright promises that entice them to achieve huge returns. Have you ever seen an announcement of trading systems that can double your account balance within a week? Or will you get a 1000% return? Those who promote these systems claim that they will achieve the promised results because the Forex market allows the use of leverage – which allows control of funds much more than your actual balance, and thus allows huge profits from these huge deals. Of course, these people overlook the fact that the leverage may also cause heavy losses, and to the degree that it wipes out your entire account in one night and sometimes a few minutes or seconds.
The fact of the matter is that although there is leverage in the Forex market, most successful traders handle it with great caution, and they may not use it at all. The majority of traders who use leverage do not exceed their investment in a single transaction from 2.5% to 5% of the account balance. Of course, this is a very small percentage, but it achieves the desired safety. Consequently, the amount of profits that you can make during a certain period depends on the number of deals that you will open during this period and also how successful they are. Realistically speaking, successful Forex traders will be happy if they can achieve 5% to 10% return per month!
Does this mean that you cannot get more return? Of course not, but what is meant is to make your expectations realistic and to be wary of distant delusions. A 1000% profit was made in a week, but it will only happen if you get lucky at the gambling table – and after a week you will lose this 1000% and maybe more. Would you be happy if you achieved these huge returns in one or two weeks and then all the profits evaporated in the following week, or is it better to achieve small profits but at a steady pace until eventually reaching the accumulation of returns and increasing the balance in the long run? You cannot base your life on irrational speculation, but you can generate enough income through continuous trading in the Forex market.
So how can you increase your profits without gambling? One way to do this is to open more trading positions. However, the quality of the deals that you intend to do is not to be waived as it should be limited to those with the best prospects for success. In other words, the only way to increase deals is to follow more pairs of currencies or create more opportunities on the same pairs by looking at faster time frames. Nevertheless, we recommend once again be cautious when trading on fast time frames because it is a completely different environment, and previous evidence confirms that the profitability of novice traders is much better on slow time frames.
Forex trading requires a lot of patience, unless you started with huge capital, and therefore you should be happy with a monthly profit ranging between 5% to 10%. Remember, in theory, you may see exceptional earnings growth at a given moment, but real and sustainable growth requires sustained long-term profits. Thus, a return of 5 to 10%, while showing the virtues of patience and discipline, will achieve what you want in the long run. And if you feel that you need to accelerate the pace of things, then you can resort to increasing your balance and not bargaining for discipline.